2016 Results presentation November 2016 Disclaimer This document - - PowerPoint PPT Presentation
2016 Results presentation November 2016 Disclaimer This document - - PowerPoint PPT Presentation
2016 Results presentation November 2016 Disclaimer This document has been prepared by Compaa de Distribucin Integral Logista Holdings, S. A. ( Logista Holdings or the Company) for information purposes, and does not constitute an
2016 Results presentation / November 2016 / Page 2
This document has been prepared by Compañía de Distribución Integral Logista Holdings, S. A. (“Logista Holdings” or “the Company”) for information purposes, and does not constitute an offer of purchase, sale or exchange, neither an invitation for an offer of purchase, sale or exchange of shares of the Company, or any advice or recommendation with respect to such shares. This document contains certain statements that constitute or may constitute forward looking statements about the Company, including financial projections and estimates and their underlying assumptions, which are not guarantee of future performance or results, and are subject to risks, uncertainties and other important factors beyond the control of Logista Holdings that could cause final performance or results materially different from those expressed in these statements. These risks and uncertainties include those discussed or identified in the documents filed by Logista Holdings with the relevant Securities Markets Regulators, and in particular, with the Spanish Market Regulator. Analysts and investors are cautioned not to place any reliance on such forward looking statements, which reflect knowledge and information available as of the date of this document. The Company does not undertake to update or revise publicly these forward looking statements in case unforeseen changes or events occur which could affect these statements, even if these changes or events make clear that the statements shall not be realized. Finally, it should be noted that this document may contain information which has not been audited and may contain summarized information. This information is subject to, and must be read in conjunction with, all
- ther publicly available information, including if it is necessary, any fuller disclosure document published by
Logista Holdings.
Disclaimer
2016 Results presentation / November 2016 / Page 3
Index:
- Results Highlights
- Delivering on our objectives
- Business Review
- Financial Review
- Outlook
2016 Results presentation / November 2016 / Page 4
- c. +3% Economic Sales growth
- Revenues increasing by 1.7% to €9,632m
- Economic Sales reached €1,038m, up by 2.8%
- +5.3% adjusted EBIT growth to €235m
- Positive impact of litigation provision’s reversal in Q2 2015 affecting comparison
- Further expansion of Adjusted EBIT margin: +50 b.p.
- Net Income strongly increased to €132m (+21.0%)
- Economic Free Cash Flow: €340m
- More than doubling previous year’s
- Total dividends per share: €0.90
- Proposal of €0.65 final dividend to be paid in Q2 2017
Positive performance in all P&L lines: Low single digit growth in Revenues progressing into a solid double digit growth in Net Income
2016 Results Highlights Net Income growth above 20%
2016 Results presentation / November 2016 / Page 5
Delivering on our objectives
2016 Results presentation / November 2016 / Page 6
Delivering on our objectives Four building blocks
Strengthening while growing consolidated business base Expanding business base Improving efficiency Robust cash flow profile
Our objective: Attractive returns to shareholders
2016 Results presentation / November 2016 / Page 7
Delivering on our objectives Strengthening/growing consolidated business base (actions)
Maintaining leadership in tobacco (contracts renewal depends on expiry calendar):
- Spain: British American Tobacco and Japan Tobacco International
Growing services:
- Expansion of revenues from route-to-consumer information to tobacco sector
- International transport in Italy and Spain continued growing
- In transport: enlarging service level through new dedicated routes for the pharmaceutical
sector
- Supporting start up operations of new NGP factory in Italy for a client
Supporting industry/anticipating changes:
- Preparing for Track & Trace requirements in tobacco distribution: a year of joint work
- Additional services to prepare for plain packaging implementation in France
- Illicit trade: Security investments/proactivity
Consolidated business base: Positive Economic sales performance
2016 Results presentation / November 2016 / Page 8
Boosting sales into existing pipeline (wholesale):
- Partnership agreements with manufacturers increasing: new contracts in the 3 countries
- Multichannel deployment: websites, PoS terminals showing solid expansion (+1,500) in Spain
and continue growing in Italy…
- Developing our presence at PoS with new services: coolers, furniture sets, store layout, etc.
- Very successful start of distribution agreement to wholesalers with FMCG multinational in Spain
- Focus on improving sales in Italy
Developing Pharma (special focus on distribution to pharmacies):
- Additional contracts in pre-wholesaling: reinforcing our leadership position
- Positive development in first year of the new contracts in distribution to pharmacies
Delivering on our objectives Expanding business base (actions)
Economic Sales from convenience and Pharma growing at double digit
2016 Results presentation / November 2016 / Page 9
Delivering on our objectives Improving efficiency (actions)
Vertical business model:
- Continuous reduction of headcount in tobacco warehouses in Spain
- Restructuring of service points in Italy: 5 transformed into transit points
- Ending the centralisation of orders in Italy
Synergies:
- Reorganisation of transport routes
- Boosting omnichannel ordering
- Streamlining network in Italy: 19 closures
Continuous improvements:
- Increasing efficiency in picking preparation in Italy
- Reusable boxes’ project: roll-out in Italy
- Environmental measures: accelerating carbon footprint reduction, recognised for the first
time on the Climate “A” list by CDP
+50 b.p. in Adjusted EBIT margin over Economic Sales
2016 Results presentation / November 2016 / Page 10
High cash conversion:
- FCF / EBITDA increased to 125%
High pay out ratio:
- 90% of Net Profit distributed as dividends
Bi-annual dividend payments:
- 0.50 Euros/share paid in February (corresponding to final dividend fiscal year 2015)
- 0.25 Euros/share paid in August (interim fiscal year 2016)
Delivering on our objectives Robust cash flow profile
€100m paid during fiscal year 2016
2016 Results presentation / November 2016 / Page 11
Delivering on our objectives Successful year: fulfilling expectations
Strengthening while growing consolidated business base Expanding business base Improving efficiency Tobacco and Transport: Positive Economic sales performance Economic Sales from convenience and Pharma growing at double digit +50 b.p. in Adjusted EBIT margin over Economic Sales €100m dividends paid during fiscal year 2016
Dividend Yield in FY2016: 4.4%*
Robust cash flow profile
* €0.75 dividends paid during 2016; share price on 30 September 2015: €16.86
2016 Results presentation / November 2016 / Page 12
Business Review
2016 Results presentation / November 2016 / Page 13
Iberia 49% France 27% Italy 24%
Business Review Diversification across geographies and activities
Geographical Split
- Eco. Sales: €1,038m 1
- Adj. EBIT: €235m 2
1 Breakdown calculated over Eco. Sales before Corporate Centre & Others: FY 2016 €1,033m / FY 2015 €1,004m 2 Breakdown calculated over Adj. EBIT before Others & Adjustments: FY 2016 €247m / FY 2015 €235m 3 Breakdown calculated over Ec. Sales before Corporate Centre & Others and Adjustments: FY 2016 €1,081m / FY 2015 €1,052m
Breakdown of activities: Ec. Sales 3
- Tobacco & Related in all 3 regions
- Italy, less developed in Related
- Transport in Iberia
- Margins below Group´s average
- Other Businesses
- Iberia: Pharma, Publications and Lottery
- France: wholesale in other channels
FY 2015: €1,010m 1 FY 2015: €223m 2 FY 2015: 1,010m 3
Iberia 38% France 31% Italy 31%
2016 Results presentation / November 2016 / Page 14
Business Review Snapshot by segment
Corporate & Others Iberia
- Macroeconomic environment: significant growth
- Positive litigation results last year, affecting comparison
- Stable tobacco volume and no change in RSP vs. increase in FY2015
- Convenience products sales boosted by our business model
- Transport continued benefitting from activity recovery
- Significant growth in Pharma business
- Polish activities strongly growing, although very small
- Slightly higher Corporate costs
Italy
- Macroeconomic environment: fragile recovery
- Almost stable tobacco volumes, RSP increase similar to last year´s in a
market increasingly turning towards low-price brands
- Reorganisation of the distribution network
Revenues: €2,640m (+2.5%)
- Ec. Sales: €507m (+3.5%)
- Adj. EBIT: €95 (-3.0% )
Revenues: €2,611m (+3.7%)
- Ec. Sales: €245m (+6.4%)
- Adj. EBIT: €76m (+19.8%)
Revenues: €(30)m (+5.1%)
- Ec. Sales: €5m (-24.4%)
- Adj. EBIT: €(12)m (-4.6%)
France
- Macroeconomic environment: initial recovery but then stagnating
- Positive tobacco volumes, no RSP increase for the 2nd consecutive
year
- Convenience and other businesses reflected irregular consumption
performance Revenues: €4,411m (+0.1%)
- Ec. Sales: €282m (-0.8%)
- Adj. EBIT: €76m (+3.9%)
2016 Results presentation / November 2016 / Page 15
Business Review Iberia
Tobacco and Related
- Good performance of tobacco volumes:
- Cigarette: 0.0% vs. -0.8%
- RYO: -1.6% vs. -0.8%
- Stable RSP vs. rise last fiscal year: +5 cents per pack
- Value added services increased
- Very positive activity in Portugal (gaining market share)
- Strong growth in sales of non-tobacco related products, new agreements
Transport
- Long haul: Growth excluding last year’s divestment of a subsidiary in Q3
- Parcel: Increasing differentiation through value added service, very positive
performance
- Courier: Shipment growth around double digit continued
Other Businesses
- Pharma increased market share in hospitals and pharmacies
- Positive track-record in first year of contract with FMCG multinational
- Publications: contracts with new publishers mitigating sector weakness
- Lottery sales slightly increasing
Revenues: €2,271m (+2.4%)
- Ec. Sales: €248m
(+1.3%) Revenues: €330m (+0.1%)
- Ec. Sales: €227m
(+3.2%) Revenues: €130m (+11.5%)
- Ec. Sales: €74m
(+10.9%)
Adjusted EBIT
- Positive litigation results last year (€8.2m) reduced costs and affected
comparison between periods:
- Excluding non-recurring: +5.8%
- Customary cost control measures boosted recurring Adj. EBIT margin
- Adj. EBIT: €95m
(-3.0%)
2016 Results presentation / November 2016 / Page 16
Business Review France
Tobacco and Related
- Growing tobacco volumes:
- Cigarette: +1.1% vs. -0.5%
- RYO: +3.0% vs. +4.4%
- No RSP increases in FY2016 and FY2015
- Ec. Sales of convenience rising despite irregular consumption trend
- Declining prepaid telephony sector mitigated by increase in other e-
transactional products
Other Businesses
- Declining trend softened despite disruptive factors along the year: strikes,
social protests/riots and terrorist attacks affecting tourist season
- Portfolio of clients reorganisation almost finished
- Still difficult trading environment
Revenues: €4,208m (+0.4%)
- Ec. Sales: €236m
(-0.9%) Revenues: €209m (-5.6%)
- Ec. Sales: €51m
(-2.3%)
Adjusted EBIT
- Some measures to prepare operations for plain packaging implementation
- Reorganisation undertaken in the last 2 years translating into higher
Adjusted EBIT margin
- Adj. EBIT: €76m
(+3.9%)
2016 Results presentation / November 2016 / Page 17
Business Review Italy
Tobacco and Related
- Stable tobacco volumes:
- Cigarette: -0.1% vs. -0.7%
- RYO: +4.4% vs. +4.2%
- RSP increase similar to last year’s: +20 cents per pack followed by a price
reduction of some RYO brands
- Cigarette low price segment continues driving market dynamics
- Growth of value added services to manufacturers
- Several commercial actions to continue fuelling convenience products’
sales growth Revenues: €2,611m (+3.7%)
- Ec. Sales: €245m
(+6.4%)
Adjusted EBIT
- Continuous measures to control costs and improve efficiency
- Reorganization of distribution network
- New expansion of Adj. EBIT margin
- Adj. EBIT: 76m
(+19.8%)
2016 Results presentation / November 2016 / Page 18
Financial Review
2016 Results presentation / November 2016 / Page 19
Financial Review: P&L Growing business, controlling costs
(€m) 2016 2015 Δ% Revenues 9,632.0 9,471.0 +1.7%
- Eco. Sales
1,038.1 1,010.1 +2.8% (-) Distribution Costs (662.5) (647.6) (2.3)% (-) Sales and Marketing Expenses (64.3) (63.1) (1.9)% (-) Research Expenses and G&A Expenses (76.5) (76.4) (0.1)% Total Costs (803.3) (787.1) (2.0)% Adjusted EBIT 234.8 222.9 +5.3% Margin % 22.6% 22.1% +50 b.p. (-) Restructuring Cost (6.6) (12.7) 48.0% (-) Amort. of Intangibles Logista France (52.2) (52.2) 0.0%. (-) Net Loss on Disposal and Impairments 0.2 1.8 (88.2)% (-) Share of Results of Companies and Others 0.9 0.2 +418.3% Profit from Operations 177.1 159.9 +10.8%
- Revenues: Good performance of Tobacco
and related in all geographies and Pharma in Iberia more than offsett the decline of Other businesses in France
- Ec. Sales increased in almost all activity
(specially Pharma, Transport and Tobacco and Related in Spain and Italy) above the decline in France
- Cost growing well below recurring activity:
not fully comparable to last year’s (-1.0% LFL)
- New expansion of Adj. EBIT margin
- Lower restructuring costs reflecting activity
improvement
- No impairment needed
- Profit from Operations growing above Adj.
EBIT and Ec. Sales
2016 Results presentation / November 2016 / Page 20
Financial Review: P&L Net Income growth above 20%
(€m) 2016 2015 Δ% Profit from operations 177.1 159.9 +10.8% (+) Financial Income 13.7 12.4 +10.8% (-) Financial Expenses (3.1) (4.3) +28.0% Profit before taxes 187.8 167.9 +11.8% (-) Corporate Income Tax (55.3) (58.0) (4.8)%
Effective Income Tax Rate 29.4% 34.6% +520 b.p.
(+/-) Other Income / (Expenses) (0.1) (0.3) +60.0% (-) Minority Interest (0.3) (0.4) +21.1% Net Income 132.1 109.2 +21.0%
- Positive Financial Result:
- Improvement of results from an affiliate
company dedicated to electronic banking for the tobacconist channel in Italy
- Lower interest rates on higher average
cash position
- Lower effective corporate income tax rate:
- Reduction of nominal rate in Spain
- Deductions linked to IPO in Spain for 3
years (including FY2016)
- Adjustments in Deferred Taxes due to
future announced CIT reductions
2016 Results presentation / November 2016 / Page 21
Financial Review: Working Capital Annual evolution of cash position
- Seasonality driving cash position to its
peak towards year end
- Dividend payments:
- February (€66.4m) Final 2015
- August (c. €33.1m) Interim 2016
(€m) Mínimum Average Maximum Cash 699 1,582 2,603
2016 Results presentation / November 2016 / Page 22
Financial Review: Investments Investing in differentiation
- > 40% dedicated to technology
- Limited investment in warehouses:
asset light business model
(€m) 2016 2015 Δ% Maintenance 3.1 4.3 (27.9)%
Infrastructure 11.7 13.2 (11.4)% IT investments (technology) 10.1 13.2 (23.5)% Total investments 24.9 30.7 (18.9)%
2016 Results presentation / November 2016 / Page 23
Financial Review: Economic Free Cash Flow
(€m) 2016 2015 Δ EBITDA 273 261 12 Working Capital Variations and Others 119 (19) 138 Corporate Income Tax Paid (40) (70) 30 Financial Income and Expenses Flows 11 8 3 Cash Flow From Operating Activities 363 180 183 Net Investments (23) (28) 5 Economic Free Cash Flow 340 152 188 % over EBITDA 125% 58%
- Substantial improvement due to:
- Increase in results
- More favourable working
capital position at year end (average position during the year was stable compared to preceding year)
- Increase in FCF generation
2016 Results presentation / November 2016 / Page 24
Financial Review: Dividend Policy
- Directors will propose a dividend distribution for year ended September 2016 of
€119.3 million
- Interim dividend paid in August 2016 (€0.25 per share, c. €33.1m)
- Final dividend per share: €0.65 (number of shares: 132,750,000, treasury stock: 275,614)
- Payable at the end of second quarter of fiscal year 2017
- Directors intend for the next years to distribute, at least, 90% of reported net profit in
dividends
- Interim dividend: 1/3 of the previous year’s total dividend, in the fourth quarter of the relevant
fiscal year
- Final dividend: in function of reported net profit, in the second quarter of the next fiscal year
2016 Results presentation / November 2016 / Page 25
- Highly resilient business model
- Superior profitability with improving margins
- Robust Economic Cash Flow profile
- Attractive Dividend Pay-out profile
Financial Review: Conclusions TSR 2016*:+22.2%
* Source: Bloomberg, from 30 September 2015 to 30 September 2016 (without dividends’ reinvestment )
2016 Results presentation / November 2016 / Page 26
Outlook
2016 Results presentation / November 2016 / Page 27
- Current trading environment suggests a similar Adjusted EBIT growth rate in FY2017
- Slightly higher restructuring costs, depending on activity evolution
- Positive impact in Financial Results from divestment of Italian subsidiary (e-bank ITB )
- Existing deductions in Corporate Income Tax could translate into Net Income growing at
double digit given +4% to +5% Adjusted EBIT growth
Outlook 2017 Similar growth rates for Adjusted EBIT and Net Income
The uncertainties surrounding the impact of plain packaging implementation in France at the beginning of Q2 2017 is difficult to evaluate and may hamper the achievement of the expected results
2016 Results presentation / November 2016 / Page 28
Appendix
2016 Results presentation / November 2016 / Page 29
Tobacco Volumes Evolution Stronger volume trend in all geographies
1 Oct. 2015 – 30
- Sept. 2016
1 Oct. 2014 – 30
- Sept. 2015
1 Oct. 2013 – 30
- Sept. 2014
1 Oct. 2015 – 30
- Sept. 2016
1 Oct. 2014 – 30
- Sept. 2015
TOTAL Cigarettes
168,300 167,734 168,895 +0.3% (0.7)%
RYO/MYO
20,955 20,617 20,126 +1.6% +2.4%
Cigars
3,842 3,968 4,040 (3.2)% (1.8)%
SPAIN Cigarettes
46,144 46,136 46,528 +0.0% (0.8)%
RYO/MYO
6,509 6,618 6,675 (1.6)% (0.8)%
Cigars
2,066 2,128 2,153 (2.9)% (1.2)%
PORTUGAL Cigarettes
1,786 1,675 1,694 +6.6% (1.1)%
RYO/MYO
139 166 192 (16.5)% (13.3)%
Cigars FRANCE Cigarettes
46,545 46,027 46,261 +1.1% (0.5)%
RYO/MYO
9,787 9,501 9,105 +3.0% +4.4%
Cigars
1,296 1,356 1,401 (4.4)% (3.2)%
ITALY Cigarettes
73,825 73,896 74,412 (0.1)% (0.7)%
RYO/MYO
4,520 4,330 4,154 +4.4% +4.2%
Cigars
480 484 486 (0.9)% (0.4)%
Million units % Y-o-Y Change
2016 Results presentation / November 2016 / Page 30
Revenues Evolution By segment and activity
(€m) 2016 2015 Δ% Iberia 2,639.9 2,576.7 +2.5% Tobacco & Related 2,270.9 2,218.1 +2.4% Transport Services 329.9 329.5 +0.1% Other Businesses 129.9 116.5 +11.5% Adjustments (90.8) (87.4) (3.9)% France 4,410.8 4,406.9 +0.1% Tobacco & Related 4,207.9 4,193.0 +0.4% Other Businesses 209.3 221.6 (5.6)% Adjustments (6.4) (7.7) +17.6% Italy 2,611.2 2,518.9 +3.7% Tobacco & Related 2,611.2 2,518.9 +3.7% Corporate & Others (29.9) (31.5) +5.1% Total Revenues 9,632.0 9,471.0 +1.7%
2016 Results presentation / November 2016 / Page 31
Economic Sales Evolution By segment and activity
(€m) 2016 2015 Δ% Iberia 506.7 489.5 +3.5% Tobacco & Related 248.4 245.1 +1.3% Transport Services 227.3 220.2 +3.2% Other Businesses 73.6 66.4 +10.9% Adjustments (42.6) (42.2) (0.9)% France 281.8 284.2 (0.8)% Tobacco & Related 236.3 238.6 (0.9)% Other Businesses 50.5 51.7 (2.3)% Adjustments (5.0) (6.2) +18.4% Italy 244.9 230.2 +6.4% Tobacco & Related 244.9 230.2 +6.4% Corporate & Others 4.7 6.3 (24.4)%. Total Economic Sales 1,038.1 1,010.1 +2.8%
2016 Results presentation / November 2016 / Page 32
Adjusted EBIT Evolution By segment
(€m) 2016 2016 Δ% Iberia
95.1 98.1 (3.0)%
France
76.2 73.3 +3.9%
Italy
75.7 63.1 +19.8%
Corporate & Others
(12.2) (11.6) (4.6)%
Total Adjusted EBIT
234.8 222.9 +5.3%
2016 Results presentation / November 2016 / Page 33
Balance Sheet
(€m) 2016 2015 PP&E and other Fixed Assets 208.7 216.0 Net Long Term Financial Assets 10.0 9.5 Net Goodwill 919.1 919.1 Other Intangible Assets 602.4 660.7 Deferred Tax Assets 22.4 40.9 Net Inventory 1,085.8 1,060.5 Net Receivables 1,793.1 1,773.0 Cash & Cash Equivalents 2,062.7 1,798.3 Total Assets 6,704.2 6,478.0 Group Equity 471.4 442.6 Minority interests 2.1 1.8 Non Current Liabilities 37.6 48.2 Deferred Tax Liabilities 328.5 328.1 Short Term Financial Debt 33.6 31.7 Short Term Provisions 17.1 16.8 Trade and Other Payables 5,813.9 5,608.8 Total Liabilities 6,704.2 6,478.0